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 Home > GOLDBOOK 2003 > BASIC SERVICES: A Pick-n-choose Parade
  GOLDBOOK 2003
BASIC SERVICES: A Pick-n-choose Parade
Continued from page: 1

Voice&Data
Monday, March 31, 2003

Buying Tips

Buying Tips
Basic service providers can be differentiated on the basis of area of coverage and service provisioning. Depending on the area under use, one can categorize the service provider in terms of regional or an all-India player. BSNL and Reliance fall under the all-India service provider category, whereas companies Shyam Telelink, and HFCL Infotel are operating in just one circle each. Tata and Bharti are midway as far as the scales of operation are concerned. In terms of service provisioning, we have an integrated player who provides all types of services—basic, cellular, Internet, DLD, ILD, and broadband. Companies like BSNL, Reliance, Bharti, and Tata fall under this category, while Shyam, and HFCL, provide some portions of the above services.

Since a reliable telecom infrastructure is a must for any corporate for its smooth functioning, one has to be very careful in choosing the best service provider, considering the above service differentials, such that voice and data needs of corporates can be addressed in the best possible way. It is not easy to switch from one service provider to another in the long run, as one has to write-off installation and maintenance costs. Therefore, it becomes all the more important to choose the best service provider.

Even BSNL, the incumbent operator, is moving towards one-point solution for enterprise customers and so is the Tata Group.

n Suite of Services: At present, in most of the state circles, corporates do not have many options but have to be satisfied with whatever little that is available, either through an incumbent or through private service provider, in the state. But with the coming of Reliance and Tata one will have a lot of option to choose in terms of service. Integrated telecom players have an advantage as they can cater to a complete range of voice and data needs of corporates. Since their infrastructure is available throughout the country, they can provide an end-to-end connectivity.

Service providers are currently offering services like ISDN, leased line, Internet leased ports, DSL, VPN, data center, and co-location facility. Currently, all operators are either offering or are planning to offer the above suite of services. Bharti, Reliance, and Tata do have an advantage in comparison to other service providers—they can provide leased line facility as they are also DLD players.

n Degree of Management: Enterprise customers should focus on those service providers who can provide end to end solutions rather than piecemeal solutions whether it is services or bandwidth. Not all companies are providing solution. In most of the cases, the service provider can put the blame on BSNL network as it is a good excuse for the service provider.

However that may not be the case always.

n Coverage Area: If a service provider has an all-India infrastructure, corporates have an advantage, as they have only one point of contact for all their communication needs. And if corporates desire to expand their office in a particular city, they have to just make a call and the connection is provided. The other advantage is that the service provider can optimize the network in the best possible way, so that communications cost can be minimized and the network reliability can be increased. Even installation and AMC costs can be reduced. Service providers can improve quality-of-service (QoS) because they can provide an end-to-end solution and thus provide QoS on end-to-end circuit rather than only on those circuits where they have a network presence. Small regional players, in order to compete with all-India players, should also start giving end-to-end QoS and for this, they have to enter into collateral arrangement with other regional and all-India service providers. In the case of regional players it becomes difficult to provide the same SLA (service level agreement) as they have to ride on different service provider for different region.

Top Basic Service Providers (in subscriber terms)
Rank Company No of Subscribers Net Addition Growth
2001-2002* 2000-01** 2001-02 (in %)
1 BSNL 33,415,197 28,109,179 5,306,018 18.87
2 MTNL 4,542,928 4,334,729 208,199 4.8
3 Bharti Telenet 160,000 125,000 35,000 28
4 Hughes Tele 159,500 69,599 89,901 129.16
5 Tata Tele 150,000 58,709 91,291 155.49
6 HFCL Infotel 65,000 13,326 51,674 387.6
7 Shyam Tele 30,000 13,000 17,000 130.76
8 Reliance Telecom NA 160 NA NA
NA stands for not available  *Stands for subscribers as on 31.03.02  **Stands for subscribers as on 31.03.01   V&D Estimates

On the QoS front, corporates should look forward for error-free, crystal-clear voice without noise and connection drops. On voice and data fronts, one has to look for error-free and synchronized transfer of data.

n Provisioning Time: For leased line as well as normal telephone connections service providers are taking a lot of time. The service provider that can reduce this time has a clear edge over others.

Subscriber Base of Private Operators (as on 31 March, 2003)
Company Circle Wireline FWT WLL (M) Total
Bharti Telenet Delhi 32,402 0 0 32,402
Haryana 31,092 0 0 31,092
Karnataka 23,883 0 0 23,883
Tamil Nadu 50,910 0 0 50,910
MP 165,618 30,115 0 195,773
Bharti Telenet All 303,905 30,115 0 334,020
HFCL Infotel Punjab 61,144 17,613 35,858 114, 615
Reliance Telecom Gujarat 300 700 0 1,000
Shyam Telelink Rajasthan 26,171 3,536 29,637 59,344
Tata Teleservices AP 91,244 59,540 94,421 245,205
Delhi 648 1,619 8,938 11,205
Gujarat 243 2,999 2,670 5,912
Karnataka 0 5,679 5,453 11,132
Tamil Nadu 90 6,662 4,280 11,032
Tata Teleservices All 92,225 76,499 115,762 284,486
Total 642,786 178,831 181,257 1,002,874

Source: ABTO

n Pre-sales/commissioning/after-sales Support: Those service providers who can outscore on pre-sales, commissioning and after sales support will definitely have an edge over others. The most crucial factor is the after sales support because most of the service providers focus more on the first two parameters. They have to focus on customer support because if the link goes down it has to be activated at the earliest and they should have a 24*7 help desk service that helps in proactive network monitoring and support.

VPT Status* of Service Providers
Companies Target Installed
BSNL 514,631 468,016
Bharti Telenet 16,500 348
HFCL Infotel 5,442 32
Hughes Tele.com 25,760 161
Reliance Telecom 8,635 2
Shyam Telelink 31,834 249
Tata Teleservices 9,635 114
*VPT status as on 30 April 2002

V&D Estimates

n Network Uptime: Today, service providers provide SLA up to 95–98 percent, but still they have to go a long way before they can achieve a reliability of 99 percent and above. Corporates have to see whether the network is fully redundant and provides an alternate path when the network is down. Corporates are interested in signing a single SLA with the service provider rather than signing many SLAs, as in the past, with different service providers. This simplifies the matter for corporates as now they have to contact only one agency for all their communication needs. In case of a failure, the service provider can be bound by stiff penalty clauses, and thus can be asked to deliver what was promised so accountability can be fixed.

Top 5 Factors Affecting Purchase Decisions
Rank Factors
1 Brand name/company image
2 Wide range of product/services
3 Company is part of large group
4 Offers value for money product/services
5 Customer oriented

n Quality-of-Service: The only differentiating factor between service providers is quality-of-service. The important parameters are mean time to repair, single toll-free number, network optimization through the network monitoring center, a similar QoS in all centers, end-to-end QoS by opting for collateral arrangement with different service providers.

ARPU Comparison of SPs
Companies

ARPU

DEL: Employee

a (per month) Ratio
BSNL 586.06 92.75
Bharti Telenet 843.75 457.14
HFCL Infotel 1,025.64 95.87
Hughes Tele.com 1,319.22 191.7
MTNL 1,127.59 74.78
Shyam Telelink 1,000.00 83.33
Tata Teleservices 832.77 266.66

V&D Estimates

n Value-added Services: With corporates having varying needs, many service providers help corporates go for a cost-effective network, one that is robust and reliable, by providing free consultancy. With intelligent (IN) switches coming in, service providers can provide a number of value-added features that come through the switch, and other features or services that can be integrated, once there is a demand for those services in the market.

n Pricing: In basic services, the prices are presently regulated by the regulator so not much can be done on this front.. But the enterprise customer should focus more on the hidden costs and discount schemes available with different service providers.

The corporate must consider the minimum hidden costs, such as interest free registration, activation charges, deposit for services, administrative costs, and add-on-service.

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